With sales still on the slide,
Coach Inc.
on Thursday shook up its management, but the company noted progress in its turnaround efforts.

Andre Cohen,
a longtime Coach executive who had previously run the Asian business, was elevated to president of its North American division, succeeding
Francine Della Badia,
who will leave the company in February. Also departing is
Stephanie Stahl,
who led global marketing and strategy. She will be succeeded by
David Duplantis,
who has spent 15 years with Coach, most recently overseeing its digital strategy.

Chief Executive
Victor Luis
pointed to signs that his plans to improve the company’s results are working, citing increased sales at 20 remodeled stores that showcase Coach’s new image as a lifestyle brand that includes shoes, apparel and accessories in addition to handbags.

“Their performance was substantially better than the rest of the fleet and provided the most compelling evidence that we are moving in the right direction,” Mr. Luis said. Coach is planning to remodel 150 stores and open 50 to 60 new stores showcasing its retooled image by the end of its fiscal year in June.

Even so, sales at existing North American stores plunged 22% in the three months through Dec. 27, excluding newly opened or closed locations. While that is a slight improvement over the 24% drop in the October period, it is far deeper than the 14% drop the year before.

As part of its repositioning, Coach has greatly curtailed promotions, which Mr. Luis said was partly to blame for the sharp sales decline. He added, however, that the company’s research showed that by offering fewer deals, it has started to regain its standing with consumers as a high-quality brand.

Coach also has had to fend off competition from rivals including
Michael Kors Holdings Ltd.
and Tory Burch, which have leveraged the celebrity status of their designers to win over shoppers. Coach has responded by adding higher-quality materials and edgier designs.

Coach’s earnings fell 38% in the latest quarter to $183.5 million from a year earlier. Total sales fell 14% to $1.2 billion.

Analysts expressed relief that results weren’t worse, but also said Coach had a long way to go to regain its former health.

“We continue to believe it will be difficult for COH to execute its transformation strategy,”
Paul Lejuez,
a Wells Fargo analyst, wrote to clients, referring to Coach by its stock symbol.

The company also faced challenges in its international business due in part to the strength of the dollar. In Japan, sales fell 7%, excluding currency fluctuations, hurt by a consumption tax that was instituted last year. Sales in China rose 13%.

Handbags priced over $400 now make up 30% of Coach’s total handbag sales, up from 20% a year ago, Mr. Luis said. But he added that Coach needed to do a better job offering more basic styles, particularly those that would be bought as gifts during the holiday season.